W v Accident Compensation Corporation
[2018] NZHC 937
•3 May 2018
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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE
CIV-2017-485-000557
[2018] NZHC 937
UNDER Section 162(3) of the Accident Compensation Act 2001 IN THE MATTER
of an appeal against a decision of the District Court at Wellington
BETWEEN
W
Appellant
AND
ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 9 April 2018 Counsel:
L J Newman and C L Kerr for Appellant
A S Butler and M J K Dodd for Respondent
Judgment:
3 May 2018
JUDGMENT OF COLLINS J
PART I INTRODUCTION
[1] Two questions of law are addressed in this judgment. Those questions are set out in [5]. Both questions arise in the context of the appellant, W,1 having been seriously assaulted and injured by her birth mother when she was only about 14 weeks
1 The appellant’s name, address, occupation and particulars that could lead to her identification have been suppressed pursuant to s 160(1) of the Accident Compensation Act 2001.
W v ACCIDENT COMPENSATION CORPORATION [2018] NZHC 937 [3 May 2018]
old. W has never remembered suffering the injuries, which fully healed by the time she was about nine months old.
[2] When she was five years old, W was told about the injuries and how they had been inflicted by her birth mother. From that time onwards, W suffered a pain disorder and in due course developed a number of psychological conditions, which fall within the definition of “mental injury” in s 27 of the Accident Compensation Act 2001 (the Act).2
[3] The issue of whether W is entitled to cover for her mental injuries hinges upon the definition of “personal injury” in s 26(1) of the Act, which defines personal injury as including:
(c) mental injury suffered by a person because of physical injuries suffered by the person.
[4] The Accident Compensation Corporation (ACC) accepted W had cover for her physical injuries but declined cover for her “mental injuries”. ACC’s decision was based on its understanding that W’s mental injuries were not caused directly by her physical injuries but by her learning of her injuries and the circumstances under which they were inflicted.
[5] In the District Court, Judge Henare dismissed W’s appeal from a Review of ACC’s decision and concluded W was not entitled to cover for her mental injuries. The two questions of law that have been posed for my consideration arising from Judge Henare’s decision are:3
(a)What is the proper ambit and meaning of the words “because of” in s 26(1)(c) of the Accident Compensation Act 2001?
(b)Was her Honour correct to hold that a “direct” causal link between the physical injury and mental injury was required to satisfy s 26(1)(c) of the Accident Compensation Act 2001 (mental injury suffered because of physical injury)?
2 Accident Compensation Act 2001, s 27:
“Mental injury means a clinically significant behavioural, cognitive, or psychological dysfunction”.
3 W v Accident Compensation Corporation [2017] NZHC 2553.
[6]The answers to these questions are:
(1)The ambit and meaning of the words “because of” in s 26(1)(c) of the Act depends on the context in which the claim for cover is made. In most cases, s 26(1)(c) of the Act will require that the claimant’s physical injuries are both a factual and legal cause of his or her mental injuries. These requirements will be satisfied where two tests are met. First, subject to the possible exceptions outlined in [63], the “but for” test must be satisfied. Second, the physical injury must “materially contribute” to the claimant’s mental injury.
(2)The District Court erred when it held that there needed to be a direct causal link between W’s physical and mental injuries in order to satisfy the requirements of s 26(1)(c) of the Act.
[7] Broadly speaking, claims under s 26(1)(c) of the Act fall into one of two categories. The first is where the aetiology of a claimant’s mental injury is connected in a physiological sense to his or her physical injury, for example, where a victim of a brain injury undergoes biological changes in his or her brain, which results in depression.
[8] The second category is where the aetiology of the claimant’s mental injury includes his or her knowledge of the fact that he or she suffered a physical injury, for example, a claimant who suffers depression because they know they have been assaulted.
[9] It is the second category of case that presents the greatest challenges from a legal perspective and engages a number of concepts that make up the law of causation. W’s case falls into the second category and is made even more complex by the fact that there was a significant delay between the physical injuries and her being told of those injuries.
[10] This is also a case that required decision-makers to carefully assess a range of factors that impacted upon whether or not W suffered her mental injuries because of
the physical injuries she suffered when she was about 14 weeks old. Those factors, which are explained in [17] and [80], required an evaluation of the evidence and the drawing of reasonable inferences.
[11] There are several factual issues that still require careful analysis in this case. Reasonable inferences may still need to be drawn. I have therefore decided to allow W’s appeal and remit her case back to the District Court for rehearing in accordance with the directions set out in this judgment.4
PART II BACKGROUND
W’s injuries
[12] On 4 April 1979, when she was approximately 14 weeks old, W was admitted into a hospital where it was found she had fractures to her skull. The attending doctors also found evidence of earlier fractures in both of W’s femur at the point where they attach to her pelvis (hip fractures). I refer to the skull fractures and hip fractures as W’s “physical injuries”.
[13] The attending doctors concluded W had been the victim of serious assaults. When her mother failed to provide any satisfactory explanation for W’s physical injuries, arrangements were made for W to be placed initially in the care of the Director-General of Social Welfare and subsequently with a foster family. In due course, W’s foster family adopted her, but for convenience I will simply refer to W’s new family as her “foster” family.
[14] W’s physical injuries had healed by October 1979 and at no stage has she had any independent recollection of being assaulted by her birth mother, or of the injuries she sustained.
4 Accident Compensation Act 2001, s 162(5); High Court Rules 2016, r 20.19.
[15] When W was five years old, her foster parents informed her of the circumstances that led to her being brought up by her new family. It was therefore only in 1984 that W learned that she had been abused by her birth mother.
[16] It appears that W started suffering pain at about the same time she was told about the physical injuries and the circumstances under which she had been removed from the care of her birth mother. Sometime later, W sought treatment from her general practitioner for headaches and a number of pain-related conditions in her legs, knees, back and shoulder. She was initially resistant to the suggestion that her pain might involve a psychological component, but later came to accept the psychological nature of her condition.
[17] W also sought treatment for several other conditions, including gynaecological problems. In addition, she suffered a number of other challenges in her life, including receiving on-going “hate mail” from her birth mother, an instance where she contemplated suicide at age 14 and being the victim of a violent relationship. W had a difficult relationship with her foster family. W is Māori, while her foster family were Pakeha, and she records lacking a sense of belonging or identity during her childhood. According to W, her foster family treated her quite harshly, often saying things to the effect of “your mother abused you, it wasn’t our fault” and “don’t take it out on us”. W was also convicted and sentenced to a term of imprisonment for cultivating cannabis. W started using cannabis at age 14 to deal with the chronic pain she was experiencing. Finally, W’s cousin, whom she had relied upon for emotional support, committed suicide in 2010. I explain the possible relevance of these factors at [80].
[18] On 4 November 2010, W lodged a claim for cover with ACC for both her physical injuries and for the pain she was experiencing in her lumbar spine (later recognised as a mental injury claim). On 25 May 2011, ACC accepted W’s claim for cover in relation to her hip and skull fractures first diagnosed on 4 April 1979, but declined to accept W’s claims for cover in relation to her pain in the lumbar spine due to a lack of “contemporaneous medical information” regarding that injury.
[19] On 4 June 2012, W’s general practitioner wrote to ACC saying that the physical beatings suffered by W and the “realisation” that W’s mother had abused her would
leave “lifelong psychological scars such as emotional trauma and long term depression”.
[20] ACC responded by seeking an opinion from Dr Lowe, a clinical psychiatrist. On 24 September 2012, Dr Lowe provided her report to ACC in which she advised that W had a pain disorder and partial cannabis dependency. Dr Lowe said that W’s “… knowledge of how [her] physical injuries were incurred and her biological mother’s behaviour towards her … resulted in psychological distress, however the actual physical injuries themselves only play[ed] a minor role in the development of [W’s] pain disorder”.5
[21] ACC then sought an appraisal of Dr Lowe’s report from Dr Maillard, a psychologist, who concluded Dr Lowe’s report demonstrated that W did “not meet the criteria for a mental injury [under the Act]” because her pain disorder was not “a result” of the physical injuries that W had suffered soon after her birth.
[22] On 18 December 2012, ACC issued a decision declining W’s claim for cover for mental injury. W sought a review, which was dismissed on 8 October 2013.
[23] The lawyers acting for W then obtained an opinion from Dr Davis, a consultant psychiatrist. He agreed with Dr Lowe that W suffered a pain disorder and cannabis dependency. He also diagnosed a “depressive disorder not otherwise specified” (depressive disorder), a diagnosis referred to in DSM-IV.6
[24]In his report, Dr Davis said:
(1)That “there were no direct ongoing physical consequences” of W’s physical injuries, “in other words any pain [W] experienced in her childhood (she reports that this pain was from age five onwards) does not appear to be temporally or causally linked to the original physical injuries sustained as a child”.7
5 Report of Dr C Lowe, dated 24 September 2012, at 9.
6 A condition that continues to be recognised in DSM-5, American Psychiatric Association (2013).
7 Report of Dr M Davis, dated 7 October 2014, at 11.
(2)The physical injuries were not “a direct or significant substantial cause of her cannabis dependence disorder”.8
(3)The physical injuries were “a likely co-contributory cause” of her depressive disorder.9 Dr Davis reported that the fact W was injured in a serious and potentially lethal way by her birth mother was “an emotionally traumatic revelation to her”, which impacted on W’s life in a psychological sense.10 Dr Davis observed that “the fact that she was treated as an infant in a physically abusive way by her own mother was distressing” for W and was a contributing factor to her depressive disorder.11 Dr Davis also recorded W had “many other life events … which have led to ‘mental consequences’, for example, imprisonment, cannabis dependence, [and] difficulties dealing with chronic pain”.12
[25] ACC sought further comments from Dr Maillard about Dr Davis’ report, which were provided on 29 September 2015. Dr Davis then responded to Dr Maillard’s comments in a supplementary report, dated 27 October 2015, in which he said that W’s depressive disorder was a mental consequence “of the fact that [W] had been physically injured as an infant in the way that she was, and that she learned of that fact”.13 Dr Davis said W’s mental injuries were “the direct, significant and substantive cause of the intense and ongoing and increasing emotional distress that followed learning” of her physical injuries and how they were inflicted.14
District Court decision
[26] Two grounds of appeal were advanced in the District Court. The first was a contention that W had cover under the Accident Compensation Act 1972 (the 1972 Act), the relevant provisions of which are explained in [34]. That argument required a claim to have been filed on W’s behalf under the 1972 Act. There was no evidence
8 Report of Dr M Davis, above n 7, at 16.
9 At 16.
10 At 17.
11 At 17.
12 At 17.
13 Supplementary Report of Dr M Davis, dated 27 October 2015, at 3.
14 At 3.
of such a claim having been filed. Judge Henare accordingly dismissed this ground of appeal and it is not pursued in this Court.
[27] The second ground of appeal required W to demonstrate that she would have had cover both under the 1972 Act and under the Act, as required by the transitional provisions of the Act.15 This in turn required W to establish that her claim for cover for her mental injuries came within the definition of “personal injury” in s 26(1) of the Act. That is to say, W needed to establish that her mental injuries were “suffered … because of [the] physical injuries …” that had been inflicted by her birth mother.
[28] In her decision, Judge Henare said W needed to establish a “direct causative link” between her physical and mental injuries in order to bring her claim within the ambit of s 26(1)(c) of the Act.
[29] When applying the “direct causal link” test, Judge Henare held that both Dr Lowe and Dr Davis were satisfied W’s pain disorder and cannabis dependency disorder were caused by her being told, when she was about five years old, of the abuse she had suffered. Judge Henare applied the same process of reasoning to the depressive disorder that Dr Davis had diagnosed when concluding that none of W’s mental injuries were suffered by her because of the physical injuries that her birth mother had inflicted.
[30] In her judgment, Judge Henare also concluded Dr Davis had adopted a “but for” test in his analysis. She suggested Dr Davis’ analysis proceeded on the basis that if W was never abused then she would never have been informed of the abuse and never would have developed her depressive disorder. Judge Henare found this was not sufficient to establish a direct causal link between W’s physical abuse and her mental injuries.
[31] W sought leave to appeal to this Court on a question of law. That application was dismissed by Judge Sinclair.16 W then applied to this Court for special leave to
15 Accident Compensation Act 2001, s 360.
16 W v Accident Compensation Corporation [2017] NZACC 69 (DC).
appeal Judge Henare’s decision. On 19 October 2017, Simon France J granted special leave to W to appeal to this Court in relation to the two questions of law set out at [6].
PART III LAW
Appeals
[32] Appeals from decisions of the District Court to the High Court under the Act are confined to questions of law.17 An appeal on a question of law cannot succeed where the Court below has applied the correct law to the facts of an individual case.18 “An ultimate conclusion of a fact-finding body can sometimes however be so insupportable – so clearly untenable – as to be left to amount to an error of law”.19 That rare circumstance may arise where there is no evidence to support the determination under appeal, or where “… the evidence is inconsistent with and contradictory of the determination” or where “… the true and only reasonable conclusion contradicts the determination”.20
Interpretation of ACC legislation
[33] It has been said that the interpretation of Accident Compensation legislation “is not to be undermined by an ungenerous or niggardly approach to the scope of the cover provided”.21 This sentiment does not, however, detract from the need for courts to interpret all legislation by reference to its text and in light of its purpose.22 However, as W’s claim is to be assessed in the context of the “social contract” that underpins the accident compensation scheme (the scheme),23 she should not be denied cover except where the language of the statute is clear and unambiguous.24
17 Accident Compensation Act 2001, s 162.
18 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [25].
19 At [26].
20 Edwards v Bairstow [1956] AC 14 (HL) at 36.
21 Harrild v Director of Proceedings [2003] 3 NZLR 289 (CA) at [19]; see also Accident Compensation Corporation v Mitchell [1992] 2 NZLR 436 (CA) at 438.
22 Interpretation Act 1999, s 5.
23 Accident Compensation Act 2001, s 3.
24 See Murray v Accident Compensation Corporation [2013] NZHC 2967 at [36].
Legislative and case law history of cover for mental injury under the scheme
Accident Compensation Acts of 1972 and 1982
[34] New Zealand’s no-fault accident compensation scheme, which came into force on 1 April 1974, set out to provide comprehensive entitlements for persons who suffer “personal injury by accident”. Initially there was no definition of “personal injury by accident”. That deficiency was remedied in 1974 when Parliament passed an amendment to the 1972 Act, which provided that personal injury by accident included “the physical and mental consequences of any such injury or of the accident”.25
[35] The Accident Compensation Act 1982 introduced several changes to the scheme that need not be explored in this decision. The definition provisions in the 1982 Act, however, continued to provide that personal injury by accident included “the physical and mental consequences of any such injury or accident”.
[36] In Accident Compensation Corporation v E, which concerned a claim for cover for a mental injury suffered by an employee who attended a stressful managerial course, the Court of Appeal held that the definition of personal injury by accident in the 1982 Act did not require an applicant to demonstrate physical injuries in order to obtain cover under the scheme for mental injuries.26
Accident Rehabilitation and Compensation Insurance Act 1992
[37] The Accident Rehabilitation and Compensation Insurance Act 1992 (the 1992 Act) heralded several significant changes to the scheme. The 1992 Act was passed after three reports reviewed the scheme, culminating in a report by the then Minister responsible for ACC, the Hon W F Birch, entitled “Accident Compensation: A Fairer Scheme”.27 That report recorded that one of the objectives of the 1992 Act was to implement carefully prescribed boundaries for cover under the scheme in order to constrain the costs of the scheme. The report noted:28
25 Accident Compensation Act 1972, s 2.
26 Accident Compensation Corporation v E [1992] 2 NZLR 426 (CA).
27 Hon W F Birch Accident Compensation: A Fairer Scheme (New Zealand Government, 30 July 1991).
28 At 8.
… since the inception of the scheme, a series of statutes, administrative, and judicial decisions has resulted in an extension of the scheme’s boundaries beyond what was originally intended in respect of “injuries” arising from an “accident”; and this has resulted in substantial cost increases.
[38] The Minister’s concerns about boundary setting and prescribing the limits of cover was again emphasised by him when introducing the Bill that became the 1992 Act:29
The [new] definition of personal injury in particular will overcome the problems of boundary shifting and costs arising from a lack of appropriate definitions under the existing legislation.
[39]The definition of personal injury in the 1992 Act stated:30
… personal injury means the death of, or physical injuries to, a person, and any mental injury suffered by that person which is an outcome of those physical injuries to that person …
[40] Ms Newman, senior counsel for W, submitted that the changes to the definition of “personal injury” in the 1992 Act were driven by a desire to restrict claims arising from workplace stress. There is some support for that proposition in the report of the Ministerial Working Party on the Accident Compensation Corporation and Incapacity, which preceded Hon W F Birch’s July 1991 report.31 Further support for this view can be found in the decision of the Court of Appeal in Accident Compensation Corporation v Monk.32 While I am confident that concerns about workplace stress underpinned the changes in the definition of personal injury in the 1992 Act, the language adopted in that definition applied to all claims for mental injury, and not just claims for stress, and other mental injuries, arising from workplace environments.
Accident Insurance Act 1998 and Accident Compensation Act 2001
[41] The Accident Insurance Act 1998 (the 1998 Act) repealed the 1992 Act and redefined personal injury to include “mental injury suffered by an insured because of
29 (19 November 1991) 520 NZPD 5389.
30 Accident Rehabilitation and Compensation Insurance Act 1992, s 4(1).
31 Report of the Ministerial Working Party on the Accident Compensation Corporation and Incapacity (Ministerial Working Party on the Accident Compensation Corporation and Incapacity, 1991) at [362]-[364].
32 Accident Compensation Corporation v Monk [2012] NZCA 615, [2013] NZAR 1 at [26].
physical injuries suffered by the insured”.33 There is no discernible reason why Parliament changed the test for cover for mental injury from an “outcome of” to “because of” a physical injury suffered by a claimant. The Bills Digest, which confirmed the change, stated that “no significant changes [were] intended to be made in the definitions of personal injury”.34
[42] When the Act was passed, the definition of personal injury contained in s 26(1)(c) of the Act continued to provide that personal injury, included “mental injury suffered by a person because of physical injuries suffered by the person”.35
[43] Thus, since 1998, Parliament has stated that there can be no cover under the scheme for mental injuries unless those mental injuries are suffered because of physical injuries also suffered by the claimant. The need for a claimant to have suffered physical injuries as a pre-condition to obtaining cover for mental injuries was reflected in the Court of Appeal’s decision in Queenstown Lakes District Council v Palmer, in which the plaintiff suffered severe psychological disorders, but no physical injuries, after seeing his wife drown in a river rafting accident.36 The Court of Appeal held that Mr Palmer was entitled to pursue his common law claim against the defendants because he had no cover under the 1992 Act for his stand-alone mental injuries.
Judicial considerations of s 26(1)(c) of the Act
[44] The scope of s 26(1)(c) of the Act was referred to by the Court of Appeal in Harrild v Director of Proceedings, in the context of a civil proceeding commenced by the Director of Proceedings under the Health and Disability Commissioner Act 1994 on behalf of the parents of a stillborn child.37 The defendant was the mother’s obstetrician. A majority of the Court of Appeal held that the death of the foetus was a personal injury to the mother, who therefore had cover under the Act and was barred
33 Accident Insurance Act 1998, s 29(1)(c).
34 Accident and Insurance Bill 1998, Bills Digest No 462 (23 September 1998) at 3 and 5.
35 Accident Compensation Act 2001, s 26(1)(c).
36 Queenstown Lakes District Council v Palmer [1999] 1 NZLR 549 (CA).
37 Harrild v Director of Proceedings, above n 21. The events complained of occurred at the time the 1992 Act was in place, and the proceedings were commenced when the 1998 Act was in place. The Court of Appeal proceeded on the basis that there was “no relevant difference” between the 1992, 1998 and 2001 Acts.
from bringing a claim for compensatory damages against the obstetrician. In explaining the general structure and purpose of the scheme the Chief Justice said:38
The policy of the legislation is to provide comprehensive cover to compensate for personal injury, including mental injury which results from physical injury, in replacement of the remedies previously available under the common law …
(emphasis added)
In a similar vein, Blanchard and Glazebrook JJ said in their dissenting judgment in
Harrild that:39
… the accident compensation legislation does not cover mental injury unless
arising out of physical injury… (emphasis added)
[45] In his submissions, Dr Butler, senior counsel for ACC, submitted that the statements from Harrild referred to in [44] constitute a “formulation of the test” under s 26(1)(c) that is “settled law”. He also submitted that the decision of Dobson J in Hornby v Accident Compensation Corporation, shed “some light” on the way s 26(1)(c) is to be applied.40
[46] Hornby concerned a claimant who was already suffering depression before breaking her arm. Ms Hornby argued that the aggravation of her pre-existing depression meant she suffered mental injury “because of” her physical injury and therefore met the criteria for cover in s 26(1)(c) of the Act.
[47] In rejecting that argument, Dobson J explained that the definition of personal injury in s 26(1)(c) reflected Parliament’s intention to define “predictable boundaries on the scope of what will be covered” under the Act.41 In referring to the Court of Appeal’s references to the scheme in Harrild, which I have set out at [44], Dobson J said:42
38 Harrild v Director of Proceedings, above n 21, at [19].
39 At [71].
40 Hornby v Accident Compensation Corporation HC Wellington CIV-2008-485-763, 10 September 2008.
41 At [17].
42 At [20].
Perhaps more significant in the quotation from Harrild is the Court of Appeal's replacement of the critical words “because of” (physical injuries) with the words “results from”. That choice of words must be deliberate, reflecting a practical way of testing the link that is required between a mental injury for which cover is claimed, and the physical injury which preceded it.
Dobson J proceeded to say:43
In terms of consistency of approach, I would treat the notions of “directly caused by” and “results from” as being the same when analysing the nature of the required connection between physical injuries and subsequent mental injury.
[48] The Court of Appeal agreed with Dobson J that Ms Hornby’s depression had “nothing to do with [her physical] injury”.44 The Court declined to expand upon the causation requirements of s 26(1)(c), saying that it was not an appropriate case to resolve that question.45 The Court did say that the issue turned “to some extent on the scope of” the Court of Appeal’s judgment in Accident Compensation Corporation v Ambros,46 which I explain in [54] to [56]. The Court also said that Dobson J did not “adopt the wrong test to determine whether mental injuries are suffered ‘because of physical injuries’”.47 Dr Butler submitted that, accordingly, the requirement for a direct causal link set out by Dobson J in Hornby “remains good law”.
[49] In addition to Judge Henare in the court below, the “direct causal link” test has been followed in several other District Court decisions.48
[50] Other adjectives have also been employed to describe the causal link required between a physical injury and the mental injury suffered by a claimant. As noted earlier, the Court of Appeal in Harrild referred to a requirement that the mental injury in issue “result” from the physical injuries suffered by the claimant – an approach that Dobson J said in Hornby was consistent with the “direct causal link” test.49
43 Hornby v Accident Compensation Corporation, above n 40, at [21].
44 Hornby v Accident Compensation Corporation [2009] NZCA 576 at [37].
45 At [38].
46 Accident Compensation Corporation v Ambros [2007] NZCA 304, [2008] 1 NZLR 340.
47 At [2] and [39].
48 Message v Accident Compensation Corporation [2013] NZACC 422 (DC) at [2], [39] and [45]; O v Accident Compensation Corporation [2016] NZACC 215 (DC) at [23]-[24]; Gale v Accident Compensation Corporation [2015] NZACC 33 (DC) at [19].
49 Hornby v Accident Compensation Corporation, above n 40, at [29].
[51] Still other adjectives can be found in decisions of the District Court concerning the application of s 26(1)(c). For example, there are a series of cases that say a claimant’s physical injury has to be a “material” cause of the claimant’s mental injury.50 Other cases have said that the physical injury has to be a “substantial” cause of the claimant’s mental injury.51 Some cases have said the physical injury has to be a “real cause” of the claimant’s mental injury52 and other cases refer to a claimant’s physical injury needing to be an “effective” cause of the claimant’s mental injury.53 The phrase “significant cause” has also been used.54 In Narayanan v Accident Compensation Corporation, it was said that the claimant’s physical injury needed to be a “necessary cause” of her mental injury,55 while in Wilson v Accident Compensation Corporation, Judge Smith said that “for the mental injury to be the result of physical injury it need only be established that it was a significant contributor…” to the mental injury.56
[52] Some of these terms have also been adopted in a few High Court decisions. In Meikle v Accident Compensation Corporation¸ Williams J referred to the “requirement of material causation”,57 and in Comerford-Parker v Accident Compensation Corporation, Gendall J used the phrase “significant and substantial contributing cause”.58
50 Ghosh v Accident Compensation Corporation [2016] NZACC 285 (DC) at [17]; MC v Accident Compensation Corporation [2016] NZACC 264 (DC) at [83] and [85]; LW v Accident Compensation Corporation [2016] NZACC 32 (DC) at [36]; LS v Accident Compensation Corporation [2015] NZACC 112 (DC) at [58]; King v Accident Compensation Corporation [2014] NZACC 320 (DC) at [47].
51 Woodd v Accident Compensation Corporation DC Wellington 54/2003, 2 April 2003 at [15] and [32]; Downey v Accident Compensation Corporation DC 86/2008, 21 April 2008 at [32]; Gable v Accident Compensation Corporation DC Wellington 212/2003, 27 August 2003 at [99]; Pue v Accident Compensation Corporation [2014] NZACC 303 (DC) at [18] and [19]; Meikle v Accident Compensation Corporation DC Wellington 158/2008, 11 July 2008 at [44] and [45].
52 Accident Compensation Corporation v Griffith [2009] NZACC 84 (DC) at [18]; Meikle v Accident Compensation Corporation, above n 51, at [44]; Downey v Accident Compensation Corporation, above n 51, at [32].
53 Public Trust v Accident Compensation Corporation [2012] NZACC 229 (DC) at [199]; Nikora v Accident Compensation Corporation [2011] NZACC 265 (DC) at [42]; Hollis v Accident Compensation Corporation DC Wellington 82/2009, 15 May 2009 (DC) at [39]; Meikle v Accident Compensation Corporation, above n 51, at [45].
54 Accident Compensation Corporation v Griffith, above n 52, at [18].
55 Narayanan v Accident Compensation Corporation DC Auckland 278/2006, 8 November 2006 at [16].
56 Wilson v Accident Compensation Corporation [2014] NZACC 208 (DC) at [12].
57 Meikle v Accident Compensation Corporation HC Wellington CIV-2011-485-9, 17 August 2011 at [42](d).
58 Comerford-Parker v Accident Compensation Corporation [2011] NZAR 481 (HC) at [22].
[53] This brief analysis of the case law shows that various terms have been employed to describe the connection required between an applicant’s physical injury and their mental injury in order to qualify for cover under s 26(1)(c) of the Act. The various adjectives used in the cases I have referred to reflect different approaches to the test for causation under s 26(1)(c) of the Act. The different approaches canvassed in [44] to [52] have generated uncertainty as to how s 26(1)(c) of the Act is to be applied.
Causation analysis
[54] In Ambros, the Court of Appeal was concerned with the burden and standard of proof applicable to medical misadventure cases under the 1998 Act. In its decision, the Court outlined an approach to causation drawn from common law concepts employed in the law of negligence and issued guidance on how those concepts might apply to issues of causation under the Act. The Court said:59
Causation in tort law is usually split into two separate inquiries: causation in fact and causation in law … Causation in fact relates to whether the tortious conduct has an historical connection with the injury. This is usually assessed on the basis of a “but for” test, although the courts have relaxed this test in some circumstances … The “but for” test poses the question whether the plaintiff would have suffered the injury without (in this case) the medical error. If it is more likely than not that, absent the error, he or she would have avoided the injury, then there is causation in fact.
The second stage of the inquiry, causation in law, requires an assessment of the appropriate scope of liability for the conduct. There is then a third level of inquiry into proximity (remoteness) between the cause and the damage, although this will often merge into the second stage of the causation inquiry. Under a no-fault accident compensation regime, the third stage is likely to be more important than the second stage. This is because the emphasis at the second stage is on the extent to which it is appropriate to assign responsibility to particular persons. It is not the aim of the accident compensation regime to assign blame. At the broadest level of generality, its aim is to promote distributive rather than corrective justice by spreading the economic consequences of negligent conduct over the whole community and to provide compensation for injury (regardless of fault) … This is often described as a social contract: in return for the loss of the right to sue for personal injury, the community shares the costs of the injury … Any inquiry at the second stage would, in New Zealand, be designed to identify and take into account policy issues arising in relation to the accident compensation scheme generally and the particular statutory manifestation of that regime at issue in the case.
59 Accident Compensation Corporation v Ambros, above n 46, at [24]-[25].
[55] The passages from Ambros quoted in [54] can be reduced to the following three-step guide to causation under the scheme:
(1)The first step is to determine whether there was causation in fact, which is “usually assessed on the basis of a ‘but for’ test”.60
(2)The second step is to determine whether there is causation in law, which involves taking “into account policy issues arising in relation to the accident compensation scheme generally and the particular manifestation of that regime at issue in the case”.61
(3)The third step, which the Court said “will often merge into the second”, involves an inquiry into the “proximity (remoteness) between the cause and the damage”.62
[56] Of significance was the Court of Appeal’s assurance in Ambros that courts can reasonably infer causation in circumstances where experts cannot.63
PART IV ANALYSIS
What is the proper ambit and meaning of “because of” in s 26(1)(c) of the Act?
[57] The issue as to whether a mental injury is suffered because of a physical injury is predominantly a question of fact, the answer to which will hinge upon how the evidence, including expert evidence, is interpreted and what inferences the decision- maker can reasonably draw.
[58] Epithets such as “direct” and “material” may in some cases help in analysing the degree of connection required by law between an event and a consequence. It is important to have regard, however, to the context in which these adjectives are used,
60 Accident Compensation Corporation v Ambros, above n 46, at [24].
61 At [25].
62 At [25].
63 At [67].
as there may well be different shades of meaning in these expressions, although in some contexts they may be used interchangeably.64
[59] Parliament did not qualify the expression “because of” with adjectives such as “direct” and “material” when it enacted s 26(1)(c) of the Act. Thus, while decision- makers may occasionally employ these types of epithets to express difficult concepts, caution must be exercised so as to ensure the use of additional adjectives is applicable to the context in which the inquiry under s 26(1)(c) is being made.
[60] The reference to the requirement of a “direct” causal connection in Hornby is one such example. Dobson J was using the word “direct” (alongside similar phrases expressing the same idea, such as “results from”) in the sense that the physical injury must be a cause of the mental injury, not merely an indirect exacerbation of a pre- existing mental injury. “Direct” was not used in the sense that the cause must be immediate or proximate, which is the sense that Dr Butler relied upon in this proceeding. The issue of proximity never actually arose in Hornby, which could have been decided on the basis of the “but for” test, which I explain in [62]. The “but for” test could have determined Ms Hornby’s case because her mental injury would have existed even if she had never broken her arm. It is, therefore, wrong to treat “because of” in s 26(1)(c) of the Act as always requiring a direct causal link (in a proximity sense) between a claimant’s physical and mental injuries.
[61] The answer to the first question posed in [5] also engages wider issues of causation that can be conveniently dealt with under the following headings:
· The “but for” test;
· Multiple causes;
· Intervening events; and
· Proximity.
64 See Atkinson v Accident Rehabilitation Compensation and Insurance Corporation [2002] 1 NZLR 374 (CA) at [21].
These headings follow the guidance of the Court of Appeal in Ambros. It is to be stressed, however, that while I have resorted to headings there is a degree of overlap between some of the concepts traversed in this part of my judgment.
The “but for” test
[62] As noted by the Court of Appeal in Ambros, the “but for” test is a useful first step in determining whether or not a claimant has cover under the scheme. In the context of a claim under s 26(1)(c) of the Act, the “but for” test asks whether the claimant would have suffered his or her mental injuries without (or “but for”) also having suffered his or her physical injuries. If the answer to that question is yes, then there is no factual connection between the claimant’s physical and mental injuries and therefore no scope for cover under s 26(1)(c) of the Act. The majority of cases in which cover is denied under s 26(1)(c) fail to satisfy this test.65 The “but for” test is a useful screen for declining claims that clearly do not qualify for cover under s 26(1)(c) of the Act.
[63] There is, however, at least one category of cases in the accident compensation context in which the “but for” test might not be apposite. In Woodd v Accident Compensation Corporation66 and Greenland-Tangipo v Accident Compensation Corporation,67 the events that led to mental injuries could not be distinguished from the claimants’ physical injuries, which also occurred during those events.68 These
65 See Hornby v Accident Compensation Corporation, above n 40; Meikle v Accident Compensation Corporation, above n 57; Johnston v Accident Compensation Corporation [2010] NZAR 673 (HC).
66 Woodd v Accident Compensation Corporation, above n 51, at [34]: The claimant was pushed around, forcibly held, threatened with a gun to her head and had her hands and feet bound during a burglary. The claimant received bruising to her neck and experienced shoulder pain from being bound. She also developed PTSD from the event. Judge Cadenhead held that the PTSD was an outcome of the physical injuries because “it is artificial to server the physical injuries from the matrix of fact making up the ‘assault’”.
67 Greenland-Tangipo v Accident Compensation Corporation DC Wellington 28/2003, 3 February 2003 at [20] and [23]: The claimant developed PTSD after being assaulted by her ex-husband. She also sustained a head injury as a result of the assault. Judge Middleton held that the claimant suffered PTSD because of the physical injury. The Judge noted that “the nature of [PTSD] and the fact that it would not be initiated by the physical injury per se, but resulted from the surrounding circumstances which immediately followed that injury.” The Judge considered that the words “because of” were intentionally wider than “caused by” in this respect.
68 See also Comerford-Parker v Accident Compensation Corporation, above n 58, at [34]: The claimant panicked and ran away after having a pistol pointed at her during an armed robbery. She slipped and injured her knees in the process. The claimant developed PTSD. Gendall J rejected her claim for mental injury cover because the trauma of the robbery was the cause of the PTSD, not the knee injuries. This result is readily explicable using “but for” analysis: if the claimant had
cases may represent an exception to the “but for” test, and are referred to in order to qualify what I have said in [62] about the application of the “but for” test as a screening device. Furthermore, several other exceptions to the “but for” test have arisen in the common law, as canvassed by the Court of Appeal in Ambros.69
[64] It is also important to bear in mind the “but for” test does not purport to address legal considerations that may arise in cases involving intervening causes and proximity. These legal constructs have been devised to place limits upon the effects of the “but for” test so as to avoid what would otherwise be unreasonable liability and to attribute and apportion liability in cases where the “but for” test is unsatisfactory.70
Multiple causes
[65] The present case illustrates how, in complex cases, there may be multiple contributing causes to a claimant’s mental injury. In such cases it may be helpful to assess the extent to which a claimant’s mental injury has been suffered because of their physical injuries. The physical injuries do not have to be the sole cause of the mental injury.71 It is sufficient that the physical injury materially contributes to causing the mental injury. This means that to satisfy s 26(1)(c) of the Act, the physical injury must be a cause of the mental injury in some genuine or meaningful way, rather than just in a trivial or minor way.72
[66] The position I have outlined in [65] is slightly different from the common law test as to the required level of contribution to a plaintiff’s injury. In most cases, where two or more tortfeasors independently satisfy the “but for” test, the plaintiff need only establish that each defendant’s contribution to the plaintiff’s injury was more than
been involved in the robbery, but had not fallen over while fleeing, she still would likely still have developed PTSD.
69 Accident Compensation Corporation v Ambros, above n 46, at [26]-[52].
70 Consider, for example, the proverb that commences “for want of a nail” and progresses through more critical outcomes until “the kingdom was lost”. The “but for” test would hold liable the soldier who forgot to nail a shoe to his horse for the eventual loss of the kingdom. However, legal concepts such as proximity and intervening causes would curtail the effect of the “but for” test in that scenario.
71 Comerford-Parker v Accident Compensation Corporation, above n 58, at [32]; Accident Compensation Corporation v Griffith, above n 52, at [18].
72 I am mindful that I am introducing further adjectives into the analysis. I do so, however, to explain what I mean by a “material contribution”.
de minimis.73 The de minimis principle has also been adopted in England and Wales, under the guise of “material contribution”, where the plaintiff suffers indivisible damage caused by a combination of tortious acts and non-tortious contributions, particularly in the context of industrial diseases.74
[67] The de minimis principle is not apt in the context of the scheme, under which there is no need to devise a means of attributing fault in order to distribute the economic costs of injuries. Instead, Parliament has, in s 26(1)(c), employed the words “because of” to establish the degree of link required between a claimant’s physical injury and their mental injury. The words “because of” fit more comfortably with a test that focuses upon whether the physical injuries materially contributed to the claimant’s mental injuries, in a more substantial sense of that phrase than was adopted in Bonnington Casting Ltd v Wardlaw.75 When Parliament enacted the “because of” test, it is likely to have envisaged that a claimant would need to establish a genuine and meaningful connection between his or her physical injury and his or her mental injury, particularly in the context of the desire to introduce certainty to the boundaries for cover under the Act.
[68] In cases involving multiple contributions to a claimant’s mental injuries, the decision-maker should ask if the claimant’s physical injuries materially contributed to the mental injuries that they have suffered. This inquiry involves an assessment of the evidence and the drawing of reasonable inferences. If the claimant’s physical injuries materially contribute to his or her mental injuries, then the claimant will have established the basis for cover under s 26(1)(c) of the Act.
Intervening events
[69] A claimant may seek cover under s 26(1)(c) of the Act in circumstances where the “chain of causation” between the physical and mental injuries is broken by an intervening event.
73 Stephen Todd (ed) The Law of Torts in New Zealand (7th ed, Thompson Reuters, Wellington, 2016) at [20.2.02].
74 Bonnington Castings Ltd v Wardlaw [1956] 1 All ER 615 (HL) at 618-619.
75 The term “material contribution” in this context should also not be confused with the concept of “material and substantial cause” of a plaintiff’s loss discussed by the Court of Appeal in Price Waterhouse v Kwan [2000] 3 NZLR 39 (CA) at [28], which concerned the duty of care between auditors and clients of a solicitors’ nominee company.
[70] At common law, such intervening events are sometimes analysed under the concept of novus actus interveniens. That doctrine proceeds on the basis that the factual cause of a plaintiff’s injury is attributable to the defendant. However, as a matter of law, that factual causation is no longer treated as being a relevant cause of the plaintiff’s injury because of the intervening events.
[71] Novus actus interveniens is an inappropriate concept in the context of the no- fault principles that underpin the scheme. This is because novus actus interveniens is a legal construct that, in limited circumstances, relieves a defendant of liability for their wrongdoing and where the law determines, as a matter of policy, they should not be liable.76 The scheme aims, however, to provide cover to those who have suffered personal injury, regardless of any fault on the part of those whose actions may have caused the claimant’s injury. Thus, novus actus interveniens is not relevant to W’s claim for cover.
[72] This is not to say, however, that intervening events will be entirely irrelevant to the assessment of causation under s 26(1)(c). The fact that an event, which itself can be considered a factual cause of the mental injury, occurs after the physical injury may merge into issues of proximity.
Proximity
[73] The third and final step in the causation analysis set out by the Court of Appeal in Ambros concerns the proximity between the cause of an injury and the actual injury that is suffered. Proximity issues are, however, likely to be rare as most questions of causation under s 26(1)(c) of the Act will be able to be resolved by the “but for” and “material contribution” tests.
[74] It is clear that “the development of the mental [injury] need not be contemporaneous with [the] physical injury”.77 Many mental injuries, such as post- traumatic stress disorder, may not develop until sometime after the original incident. For this reason, a temporal gap between the physical and mental injuries cannot be
76 Christian Witting Street on Torts (14th ed, Oxford University Press, Oxford, 2015) at 168-174.
77 Comerford-Parker v Accident Compensation Corporation, above n 58, at [32].
determinative of proximity, although an extensive gap in time between the two injuries may be an important factor in assessing proximity.
[75] In the context of the scheme, the proximity step may, in rare cases, play the role of barring cover for unrealistic claims that seek to draw a tenuous link between a claimant’s physical and mental injuries.78 The requirement for the physical injury to “materially contribute” to the mental injury outlined in [65] to [68] of this judgment, should however adequately answer most causation issues under s 26(1)(c) of the Act. Thus, a physical injury that merely provides the circumstances for a later event, which results in a mental injury, would not materially contribute to that mental injury. For example, if A broke their arm, requiring attendance at a hospital, their physical injury would not be a material cause of post-traumatic stress disorder suffered by them as the result of an armed robbery at the hospital, merely because they happened to be at the hospital at the time of the armed robbery because of their broken arm.
Summary
[76] In summary, the answer to the first question posed in [5] is that the ambit and meaning of the words “because of” in s 26(1)(c) of the Act depends on the context in which the claim for cover is made. In most cases, s 26(1)(c) of the Act will require that the claimant’s physical injuries are both a factual and legal cause of his or her mental injuries. These requirements will usually be satisfied where two tests are met. First, subject to the possible exceptions outlined in [63], the “but for” test must be satisfied. Second, the physical injury must “materially contribute” to the claimant’s mental injury.
Was the District Court correct when it held that a “direct” causal link was required in this case between W’s physical and mental injuries?
[77] I shall explain why the District Court erred when it held a direct causal link was required in this case by explaining the analysis that is required.
78 For reasons similar to those traversed in [71], foreseeability is not a relevant factor under the scheme because it involves policy considerations about the extent to which a defendant should be held accountable for damage suffered by the plaintiff. As the Court of Appeal recognised in Ambros, such considerations have no place in a no-fault regime; see Accident Compensation Corporation v Ambros, above n 46, at [25].
“But for” test
[78] In the present case, the “but for” test is a useful first step in assessing issues of causation under s 26(1)(c) of the Act. Whether W’s physical injuries satisfy the “but for” test requires an assessment, on the balance of probabilities, of whether each of her mental injuries would have arisen had her birth mother never abused her when she was 14 weeks old. It is clear that, if she had never been injured when she was 14 weeks old, she would never have found out about her injuries and suffered from any mental injuries arising from that knowledge.
[79] What remains to be assessed is whether it is more likely than not that W would have suffered each mental injury even without that knowledge. Other consequences stemming from the physical injuries, as opposed to W’s knowledge of them, might also be relevant in making this determination. For instance, the factual relationship between W’s physical injuries and the other relevant factors referred to in [17] and [80]. It is also important to note that the “but for” test might produce different outcomes in the case of each mental injury
Multiple causes of W’s mental injury
[80] Dr Davis explained that, in addition to her physical injuries, a number of other unfortunate events in W’s life may have contributed to her mental injuries. Those other events included her difficult upbringing, on-going abusive contact with her birth mother, cultural isolation, a contemplated suicide, the suicide of her cousin, her term of imprisonment, her abusive relationship and her unfortunate gynaecological issues. This is therefore a case in which decision-makers need to decide, in the case of each of her mental injuries, whether or not W’s physical injuries were a material contributor to that mental injury. This requires a careful appraisal of all the evidence and the drawing of reasonable inferences.
[81] Each of W’s mental injuries involves a different combination of factors, as each arose at a different stage in her life. It appears that the pain disorder began around age five, while the cannabis dependency problems arose at age 14. It is not clear when W started suffering from the depressive disorder, but it is possible that several of the
factors referred to in [17] and [80] will be relevant to W’s depressive disorder. A few of those may also be relevant to the cannabis dependency problem.
Proximity between W’s physical injuries and her mental injuries
[82] Dr Butler referred to this concept when he submitted that “the most proximate cause of … [W’s] mental injury” was the actions of her foster parents when they told her of the physical injuries that had been inflicted upon her by her birth mother. What Dr Butler was, in effect, submitting was that W’s physical injuries were not sufficiently proximate to her mental injuries to satisfy the causal link required by s 26(1)(c) of the Act between physical and mental injuries.
[83] The key deficiency in the proximity argument advanced by Dr Butler is that it requires an artificial decoupling of W’s physical injuries from her being told of those injuries and how they were inflicted. In this case, these two events were inextricably linked. Assuming W’s claim passes the “but for” test and her physical injuries are found to have materially contributed to her mental injuries, then it must be the case that W’s mental injuries were, at least in part, caused by her physical injuries and by her being told in 1984 that it was her birth mother that had inflicted those injuries. Absent either one of those factors, W would not have suffered mental injuries, but the combination of those two factors caused her to suffer mental injuries. Accordingly, no proximity issue arises from the temporal gap between W suffering the physical injuries and the consequences of her being informed of them years later. The length of the gap is readily explained by the fact W lacked memory of the events leading to her physical injuries.
[84] This must be the case if the scheme is to provide cover in a sensible manner. There could be many instances in which a victim of a physical injury, or a sexual offence under s 21(1)(b) of the Act, might not remember the original events until a later date.79 Victims of child sex offences would fall into this category, as would a person who is drugged before they are sexually or physically assaulted. It would be perverse if the scheme failed to provide cover to a victim of abuse because the
79 Section 21(1)(b) uses the phrase “caused by” rather than “because of”, however, similar considerations to those canvassed in this judgment will likely be relevant in that context.
perpetrator took the additionally degrading step of ensuring their victim would not recall the events leading to their injuries.
[85] In addition, the result of the position taken in this case to date is to effectively deny cover because W’s foster parents were open and transparent when explaining how her injuries were inflicted. It would be unfortunate if the Act were interpreted in a way that had the effect of penalising openness and transparency in cases such as W’s.
PART V DISPOSITION
Summary of judgment
[86] W did not need to establish a direct causal link between her physical injuries and her mental injuries in order to qualify for cover under s 26(1)(c) of the Act. Judge Henare therefore erred in law when she applied that test to the circumstances of this case. Instead, what was required was an assessment of whether or not W satisfied the “but for” test and whether her physical injuries contributed in a material way to her mental injuries.
[87] The experts whose reports were considered by Judge Henare also focused their attention on whether or not there was a direct causal link between W’s physical injuries and her mental injuries rather than on whether her physical injuries contributed in a material way to each of her mental injuries. Dr Davis and Dr Lowe did, however, identify a number of other factors that may have contributed to W’s mental injuries. What appears to be missing at this juncture is a proper consideration of the “but for” test in the case of each mental injury and an assessment of whether or not W’s physical injuries contributed in a material way to each of her mental injuries.
[88] In these circumstances, the appropriate course is to allow W’s appeal and remit her case back to the District Court for rehearing. Drs Lowe and Davis should be afforded the opportunity to submit any further reports that they may be able to make in light of the contents of this judgment. The District Court will then need to make
factual findings based on all of the evidence and by drawing reasonable inferences before applying the law as explained in this judgment.
Costs
[89] W is entitled to costs on a scale 2B basis. This was a case that warranted two counsel, both of whom contributed to the hearing in a material way.
D B Collins J
Solicitors:
John Miller Law, Wellington for Appellant Russell McVeagh, Wellington for Respondent
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